Saturday, August 20, 2011
SAO PAULO (Reuters) - Brazil's CSN (CSNA3.SA: Quote)(SID.N: Quote) boosted its stake in Usiminas (USIM3.SA: Quote)(USIM5.SA: Quote) in a further step toward changing the rival steelmaker's ownership structure.
Sao Paulo-based CSN raised its holdings of Usiminas' common stock to 11.29 percent, and to 15.15 percent of preferred stock, the company said in a regulatory filing late on Friday.
Bloomberg reported that India’s Malabar Cements Ltd is seeking to import 40,000 tonnes of power-plant coal through a tender.
According to a document on the company’s website, suppliers must submit their offers by September 2.
The document said that imported coal must be of South African or Chinese origin with a minimum gross calorific value of 6,300 kilocalories per kilogram, a maximum total moisture content of 12%, maximum ash content of 15% and maximum sulfur content of 1%. Deliveries of 7,000 to 7,500 tonnes should start in October and be completed by April.
(Sourced from Bloomberg)
Bloomberg reported that UK purchases of thermal coal from the US jumped in the first quarter as demand for the dirtier- burning fuel advanced and exporters took advantage of Britain’s ability to scrub sulfur dioxide from emissions.
According to Mr Nigel Yaxley, head of the Association of UK Coal Importers a lobby group whose members include the British units of EDF SA and EON AG, coal imports from the US advanced by more than four times partly because the fuel was discounted compared with better quality shipments from traditional markets such as Russia and Colombia.
Mr Yaxley said that “The import increase is price driven, because UK power stations are buying high-sulfur coal at discounted prices.”
According to analysts at Bloomberg New Energy Finance in London, lower European Union carbon-permit prices and a shift away from nuclear power in Germany will probably boost EU demand for coal.
(Sourced from Bloomberg)
TVN Corporation shares have soared on the back of the full coal drilling results from the Nuurst Thermal Coal Project in Mongolia.
The coal seam development has now been extended to over 1.6 kilometres, with a third significant 102.6 meter coal sequence intercepted. The cumulative down hole coal seam thickness is 81.4 metres thick.
These results follow hot on the heels from the 192 metres thick coal sequence announced at the end of last month, which has multiple seams including a single seam of a substantial 115.5 metres thick.
To continue to progress the project, TVN Corporation has also placed 90 million shares at AUD 0.04 to raise AUD 3.6 million, to accelerate exploration targeting a JORC Resource.
The company will also use the funds to review the acquisition of further coking and thermal coal opportunities in Mongolia.
WA Today reported that the contagion might be global, but it seems Australia's two biggest exports are largely immune to the mayhem that has unfolded on markets in recent days.
Iron ore and coking coal prices have held firm at near record highs and experts said that they do not expect that to change any time soon.
UBS commodities analyst Mr Tom Price said the fact those commodities were typically sold by direct negotiation between producers and consumers helped ensure that prices were determined by fundamental supply and demand factors.
He said that ''There is very minimal speculative activity in these trades and so they are isolated from the very short term dramatic shifts that we've been seeing in global resource equities and commodity prices.”
He said that there would need to be longer-term negativity in global markets before there was any impact on iron ore and coal prices.
''The raw materials for steel are still secured largely under contracts, so you would need evidence that this market weakness would persist over several months before you would see a sustained decline in the value of iron ore and metallurgical coal. So we shouldn't expect any real shock to those two markets.''
That diagnosis bodes well for the Australian economy, which is expected to export close to $80 billion worth of iron ore and close to USD 50 billion worth of coking coal in the year to June 2012.
Similar confidence was expressed by analysts at Macquarie Research, who noted yesterday that prices for iron ore and coking coal had performed solidly in recent months, despite the middle of the calendar year being a traditionally weak period for those commodities.
Despite predicting a volatile period ahead for other metals, Macquarie analysts said iron ore loomed as a safe bet.
The note said that ''The more China-exposed commodities such as iron ore are likely to outperform their exchange-traded peers.”
(sourced WA Today)
Zhang Shouguo, executive vice chairman of the China Shipowners Association (CSA), has stated in an interview with Bloomberg that Brazilian mining giant Vale is seeking to control the freight market just as it controls the iron ore market.
Vale is currently building up a fleet of 19 400,000-dwt vessels for iron ore transportation, while it will rent a further 16 vessels for the same purpose. Mr. Zhang said that Vale should leave responsibility for freight to the shipping companies. He also said that with its new fleet Vale would completely control iron ore shipments between China and Brazil. (sourced steelorbis)
Evraz Group SA has launched construction of a new coking coal mine Yerunakovskaya VIII within its existing coal mining division Yuzhkuzbassugol in Kemerovo region of Russia. The total investment in the project will be RUB 17 billion spent over the next three years. The coal mine is planned to start operations by mid 2013. By the end of 2014, the mine is expected to reach a total production capacity of 2 million tonnes of raw coking coal per annum.
Mine development will start from the Yerunakovskiy VIII deposit with the potential for further expansion into the Yerunakovskiy Vostochnyi deposit. Joint development of the two deposits will provide long term stable mining operations and a guaranteed supply of high quality hard coking coal. The estimated reserves of the new areas being developed are in excess of 85 million tonnes.
The mine will be built in accordance with the highest standards of safety, health and environmental protection. It involves preliminary and in seam methane drainage as well as construction of wastewater treatment facilities. Additionally, the Company will build a new handling capacity at Kazankovskaya railway station and a new local motorway for coal transportation.
This project is in line with Evraz's strategy to further develop its coal mining operations. Construction of the new mine will increase the level of vertical integration, providing its steelmaking facilities with high quality coking coal.
Brazilian newspaper Valor Economico reported Friday that iron ore mining giant Vale plans to develop a new logistics company to handle general cargo such as steel, wood, soy and fuel. Currently Vale has rail, port and shipping assets for the transportation of iron ore.
The newspaper also said that Vale may take 30 percent of the company public in a share offer next year. Logistics operations have long accounted for a large portion of Vale's revenues. Between 2009 and 2010, revenue from logistics services jumped 14 percent to R$3.2 billion (US$2 billion).
Reuters reported that Africa, regarded as the next iron ore frontier, is only likely to boost global supply from 2020 and only if countries overcome infrastructure and political hurdles.
Mr Phillip Killicoat iron ore manager at Credit Suisse commodities said that the market for iron ore, used in stainless steel production, is the second biggest commodity trading market in the world, valued at some USD 150 billion.
He said that of that, Africa accounts for only about 2%, although it holds some 20% of the world's resources. He added that "Africa has enormous potential, never mind the fact that the iron industry itself is growing at a rate even faster than global GDP, driven primarily by East Asia."
Steel demand, spurred by China's economic growth, has recovered more than anticipated in 2010, with future growth expected to be powered by emerging markets to 2015 and beyond. Africa, the world's poorest continent where many countries still rely on their minerals as a key foreign currency earner, hopes to cash in on this forecast amid good prices for iron ore.
Mr Yaoyun Xin MD at independent metals consultancy SMM Information and Technology told Reuters that "China is expected to increasingly turn to Africa to satisfy its iron ore needs as more Chinese companies look to invest or partner in mines."
Top global iron miners, including Rio Tinto, Vale and ArcelorMittal, have projects either in production or at an exploration stage in Africa, with three major iron ore bearing regions identified in the west, central and southern parts of the continent.
At the moment, Australia and Brazil are the two top global producers of the material, with South Africa being the only African country recognized as a major exporter, accounting for about 80% of the continent's total output.
Mr Ian Cope, global exploration manager for iron and coal at ArcelorMittal, said that "African projects are only expected to contribute less than 5 percent of the projected 47% growth in global iron ore demand by 2020. The potential is there but there are challenges and it's not a given that this ore will get out of Africa."
Mr Cope said that most of the iron ore in Africa was of a lower grade, although top grade hematite deposits were found in South Africa, the Democratic Republic of Congo and Guinea, where the promising Simandou deposit was in the process of being mined.
Mr Ernst Venter, a manager at Exxaro, said that "By 2025 we see it is possible that Africa can supply 200 million tonnes per annum of additional iron ore into the iron ore market."
He said the forecast excludes current expansion plans for the Sishen mine owned by Kumba Iron Ore, the world's 10th largest producer and the biggest in Africa.
(Sourced from www.reuters.com)
African Minerals confirmed that the Tonkolili iron ore mine in Sierra Leone will have a capacity of 15 million tonnes per annum rather than 12 million tonnes per annum. However it also revealed that phase one of the project will now cost an additional USD 284 million, including USD 132 million to increase capacity, on top of the original cost of USD 1.1 billion.
African Minerals also revised its sales outlook for the mine's ramp up period. It now expects to sell 1.2 million tonnes of direct shipping ore this year (cut from 2.5 million tonnes) while next year it expects to sell 12 million tonnes (up from 10 million tonnes).
Tonkolili is still on course to deliver its key development milestone, of first ore on ship, in the fourth quarter of this year. To achieve this AMI expects to commission its rail link from the mine by the end of September 2011.
It confirmed that excavation and civil works for the railway and the port stockyard are complete now complete. This has effectively de risked from any adverse effects of the rainy season.
Mr Frank Timis chairman of African Minerals said that "Overall the board is pleased with the achievement of the increase in Phase I capacity from 12 million tonnes per annum to 15 million tonnes per annum, with a very low capital intensity of this expansion of just USD 44 per annual tonne, allowing African Minerals to take advantage of the continued strong markets for iron ore. The overrun costs of the project are in part due to the steps that we have taken to de risk the construction of the rail and port ahead of the rainy season, to deliver the project on schedule by Q4 2011."
Reuters reported that China Citic Group has yet to decide whether to launch a counterbid for Australian coal miner Macarthur Coal Ltd which is the subject of a USD 5 billion hostile takeover from ArcelorMittal SA and Peabody Energy Corp.
Citic Group together with subsidiary Citic Resources Holdings Ltd owns about 24% of Macarthur making it the single largest shareholder of the world's biggest producer of pulverised and cleaner burning coal.
Mr Chang Zhenming Citic Group Chairman without elaborating said "It is not yet time to show our stance (on Peabody offer).”
He said that separately, Citic Group said it had not yet set a timetable for an initial public offering. We are still working on an internal restructuring we don't have a timetable yet."
Last year, media reports said CITIC Group was considering a USD 12 billion listing in Hong Kong in 2011 a move that could help the state owned conglomerate raise its profile and cut debt.
(Sourced from Reuters)
According to a Bloomberg report, Anglo American is contemplating a bid for Australia's Macarthur Coal that would challenge US coal company Peabody Energy's earlier offer for the Australian mining firm.
The Bloomberg report, citing an unnamed person with knowledge of the matter said that Anglo is looking into Macarthur's finances.
In July, Peabody, the largest US coal company, had teamed up with ArcelorMittal, the world's top steelmaker, to offer USD 5 billion for Macarthur Coal in a bid to secure its resources of pulverized coal, a key steelmaking ingredient.
(sourced from Bloomberg)
AZNCoal imports into China, the world’s biggest consumer, jumped 34 percent to a record in July, said Australia & New Zealand Banking Group Ltd. Shipments climbed “sharply”
from a year earlier to 17.53 million metric tons, Mark Pervan, an analyst at ANZ in Melbourne, said in a report today.
China bought more low-quality coal, according to the report. Imports came to 3.63 million tons for the anthracite variety, 4.05 million tons for coking coal and 9.85 million tons for thermal coal, it showed.
Coking coal is used to make steel, while thermal coal is burned to generate power. China is the world’s biggest steel producer.
Imports are set to accelerate next month or in October as utilities start to restock in anticipation of stronger winter demand, Pervan said. “Signs of a pickup in Chinese activity are supporting China imported coal prices,” he said.
China steel futures slipped to one-week lows on Friday, tracking losses in equities fed by fears the United States may be courting another recession and an unresolved debt
crisis in Europe, although firm demand hopes capped losses.
A drop in factory activity in the U.S. Mid-Atlantic region to the lowest level since March 2009 coupled with the debt crisis in the euro zone, dragged down Asian stocks, with South Korea's benchmark shedding 5 percent and Chinese stocks down 1.3 percent.
The most-active January rebar contract on the Shanghai Futures Exchange hit a low of 4,790 yuan per tonne on Friday, its weakest since Aug. 11. It closed down 0.3 percent at 4,814 yuan.
China's daily steel output has stayed above 1.9 million tonnes since late February, compared to an average of about 1.7 million tonnes last year, as Chinese mills made more steel to keep up with strong demand from the construction sector.
That has supported demand for iron ore, the key ingredient to produce steel.
"The recent rout in global markets has not had any adverse impact on iron ore prices as expectations for strong demand as well as supply tightness have supported price offers," said an iron ore trader in Beijing.
Offers for India's 63.5/63 grade iron ore remained high at $188-$189 a tonne, including freight, on Friday, traders said.
Australia's No. 3 iron ore miner, Fortescue Metals Group , said tighter credit in China was moderating iron ore demand, but underlying demand remained intact.
Fortescue is one of several iron ore miners in Australia pushing up production to meet strong Asian demand for iron ore, particularly from top importer China.
Global price indexes, based on spot deals in China and which miners use as a gauge in setting contract rates, extended gains on Thursday.
Iron ore with 62-percent iron content gained 30 cents to $177.10 a tonne, according to The Steel Index .IO62-CNI=SI, and rose 24 cents to $177.29 a tonne based on Metal Bulletin's index .IO62-CNO=MB.
Platts 62-percent gauge IODBZ00-PLT edged up 25 cents to $178.75 a tonne.
Prices of iron ore swaps sustained recent gains, with nearby contracts rising for a fourth straight session on Thursday, suggesting buyers remain optimistic the strength in spot prices can continue.
In industry news, South Korea's POSCO , the world's third-biggest steelmaker, said that one of its blast furnaces in the southwestern city of Gwangyang was on fire, but no production disruptions had been reported.
"I don't expect this will affect iron ore prices as Japan and South Korea have long-term supply contracts with suppliers and are not likely to delay shipments due to this small accident," said another iron ore trader in Beijing.
Vale SA, the world's biggest iron ore exporter, approved spending $875 million to pay its share in the Eagle Downs coal project in Queensland it owns with equal joint venture partner Aquila Resources Ltd.
Eagle Downs, an underground mine project in the Bowen Basin, is planned to produce an average of 4.5 million metric tons of steelmaking coal annually, Rio de Janeiro-based Vale said in an e-mailed statement. The Queensland government also approved the project's mine lease, it said.
Vale expects to "expedite commencement of the project" after board and government approvals, Decio Amaral, Vale's
Global Coal Director, said in the statement. "We're looking to start construction as soon as possible, with the first long wall operation in the third quarter of 2015," he said.
The Brazilian company is mining and developing coal projects from Australia to Columbia and Mozambique, aiming to boost output to 40 million metric tons by 2016. Demand for steel
will rise 6 percent next year, according to the World Steel Association.
Eagle Downs may cost A$1.2 billion to develop, Aquila said May 31, with a board decision due in the second quarter of 2012.
Aquila fell 2.9 percent to A$5.64 at 10:27 a.m. Sydney time, compared with a 2.3 percent drop in the benchmark S&P/ASX 200 index.
Friday, August 19, 2011
By Christopher Vellacott, Reuters
LONDON Aug 19 (Reuters) - Financial advisers to the world's richest people report some of their top clients have continued to make money throughout recent market turmoil by harnessing sophisticated investments out of reach to mainstream punters.
With equity markets plunging, most investors have suffered losses to their pension funds and portfolios, but those able to meet the multi-million dollar investment thresholds of private equity and some hedge funds are coming out ahead.
"You've got so many investment opportunities that are open only to very rich people," said one London-based financial adviser specialising in ultra rich investors.
"The super rich are doing very well. They're getting good advice, they're getting access to stuff that other people don't have access to," he said.
Certain investment vehicles, such as hedge funds, can thrive at times of market stress because they are able to use risk management tools such as derivatives and make short-selling sales that make money when an asset price falls.
Some big name hedge funds such as Brevan Howard, Man Group's AHL and Winton have continued to make gains for their investors during recent market volatility.
However, because some of the trades made by the funds can involve higher risks, and in the case of short selling theoretically infinite potential losses, regulators often place them off limits to small investors.
"There seems to be a moral argument against shorting, but from a purely practical point of view it leaves (hedge funds) in a better position to manage volatility," said portfolio strategist Johannes Jooste of Merrill Lynch Wealth Management, part of Bank of America Corp .
"It still remains the domain of the kind of client that can write a million dollar ticket or more ... From a regulatory point of view, the industry is not allowed to put the intermediate or the novice client into a hedge fund."
The fact that the super rich can write cheques for millions of dollars also means they have exclusive access to the few real estate assets where prices are still rising, such as the central London residential property market.
While property prices around the world drop or stagnate, according to upmarket property consultant Savills , house prices in the smartest areas of central London are set to be up 8 percent this year.
"London is driven by the international buyer. They are after the trophy assets. Once you get out of the top end, it's a little more tricky, because people are dependent on mortgages and borrowing," said Philip Selway, head of the global property wealth team at broker Knight Frank.
Selway added that a couple buying a London property earlier this year were the first British clients he had seen for three years.
London commercial property is also proving a popular investment with the ultra wealthy. British private bank Coutts, owned by Royal Bank of Scotland , plans to launch a commercial property fund in October open only to clients worth 10 million pounds or more.
"A lot of clients like the idea of being invested in high quality West End assets," said Julian Lamden, a client partner in Coutts's private office division, which caters to the bank's richest clients.
Earlier this year Citigroup raised 330 million pounds via its private bank for a commercial property fund managed by Threadneedle, mainly from tycoons and rich families in Europe, the Middle East, Africa and Asia.
Mr Beni Prasad Verma union minister of steel has said that the details of MoUs signed along with the name of companies for setting up of iron and steel plants in mineral rich states Jharkhand, Orissa and Chhattisgarh during the last three years and current year and the present status of projects, state wise and project wise are annexed, as per the record of information available in the ministry of steel.
In a written reply in the Lok Sabha he said that as per available information in the ministry of steel, POSCO India is allowed to export iron ore from Orissa as per the conditions of MoU.
The Minister said, as per the terms of MoU, POSCO may swap certain quantities (not exceeding 30% of the total requirement for the Paradeep Plant annually) of such iron ore which have high alumina content with equal quantity of low alumina content iron ore of better Fe content imported for blending, in order to produce better quality steel in the Paradeep Project and conserve energy. Any export of iron ore by way of swap will be allowed only after an equivalent quantity of ore has been imported for the plant. The extent of the above quantity of iron ore by way of replacement for equal quantity of import of higher grade iron ore, will be within the framework of the Export-Import Policy of the government of India applicable from time to time. It is clarified that no export of iron ore will be allowed from the captive mine except by way of full replacement through import of equal quantity of high grade ore and within the limits mentioned above.
Following is the list of major integrated steel producers in the country having capacities higher than 1 million tonne.
|1||Steel Authority of India Limited||12.84
|2||TATA Steel Limited||6.8
|3||JSW Steel Limited||6.6
|4||Essar Steel Limited||4.6
|5||Rashtriya Ispat Nigam Limited||2.9
|6||Ispat Industries Limited||3
|7||Jindal Steel & Power Limited||2.4
|8||Bhushan Steel Limited||1.5
|9||Bhushan Steel & Power Limited||1.2|
(*As per the latest information available in the ministry of steel)
List of Steel Plant Projects for which MoUs have been signed with the state government of Orissa
|Sl.||Name of the Company||Capacity||Investment
|1||Brahamani River Pellet Ltd.||4||1485
|2||Pradhan Steel & Power (P) Ltd.||0.5||606
|3||Tecton Ispat Private Ltd.||0.25||291
|4||Atha Mines Private Ltd.||0.25||227.13|
Capacity in million tonne per annum
Investment in INR crore
List of Iron & Steel Plant Projects for which MoUs have been signed with the state government of Jharkhand (Year 2008 onwards)
|S. No.||Company||Capacity||Project cost
|1.||VM Salgaocar & Brothers Pvt Ltd||0.5||847
|2.||Ramgarh Sponge Iron Pvt Ltd.||0.25||785
|3.||SKS Ispat and Power Ltd||1.3||655
|4.||Jupiter Iron Industries Pvt Lt.||0.25||655|
Capacity in million tonne per annum
Project Cost in INR crore
List of Steel Plant Projects for which MoU have been signed with the state government of Chhattisgarh (Year 2008 onwards)
|1.||Aarti Sponge and Power Pvt. Ltd.||Sponge Iron - 0.105, Steel Melting Shop - 0.09||305.00
|2.||API Ispat and Powertech Pvt. Ltd.||Sponge Iron - 0.525||1000
|3.||Jai Balaji Industries Ltd.||DRI Plant - 0.6, Steel Melt Shop - 1.0||1450.00
|4.||Baldev Alloys Pvt. Ltd||Sponge Iron - 0.54, SMS Plant - 0.2||430.00
|5.||Crest Steel and Power Pvt. Ltd||Sponge Iron - 0.75, Steel Melting Shop - 0.5, EAF - 0.32||1536.00
|6.||Godawari Power and Ispat Ltd.||DRI - 0.6, Steel Billet - 0.6||1570.00
|7.||Jindal Steel and Power Ltd||DRI - 5.1||18300.00
|8.||Khetan Sponge and Infrastructure Pvt. Ltd||Sponge iron - 0.09, Induction Furnace - 0.06||209.00
|9.||Nalwa Steel and Power Ltd||DRI (coal based) - 0.33, Steel Melting Shop - 0.336, DRI (gas based)-2.0||3100.00
|10.||Jaysawal Necco Industries Ltd.||Sponge Iron - 0.6, Steel Billet - 0.7||2020.00
|11.||Nova Iron and Steel Ltd||Sponge Iron - 0.6||606.00
|12.||Raipur Power and Steel Ltd.||Sponge Iron 0.135, Induction Furnace - 0.09||135.00
|13.||Rashmi Ispat Pvt. Ltd.||Sponge Iron - 0.315, Steel Melting Shop - 0.21||550.00
|14.||Real Ispat and Power Ltd||Sponge Iron - 0.30||720.00
|15.||RL Steel and Energy Ltd.||Sponge Iron - 0.4||293.00
|16.||Satya Power and Ispat Pvt. Ltd.||Sponge Iron - 0.24||376.00
|17.||Shri Shyam Sponge and Power Ltd||Sponge Iron - 0.135||205.00
|18.||SKS Ispat and Power Ltd.||Sponge iron - 1.2, Blast furnace - 0.27||3611.00
|19.||Surya Global Steel and Jenpower Ltd||DRI - 1.4, Blast furnace with PCM- 0.6||3000.00
|20.||Visa Steel Limited||Blast furnace with sinter - 1.5, Sponge iron - 1.0||4750.00
|21.||NMDC Limited||Integrated Steel Plant - 3.00||10000.00
|22.||K Energy Limited||Sponge iron - 0.21, Induction furnace - 0.192||469.00
|23.||Prakash Industries Limited||Blast furnace - 1.15, Sponge iron - 1.6, Steel Melting shop - 2.0||2750.00
|24.||Singhal Steel Pvt. Ltd.||Blast furnace - 0.3, Sponge iron - 0.2, Induction furnace - 0.3, EAF - 0.3||700.00
|25.||MSP Steel and Power Ltd.||Sponge iron - 0.9, Blast furnace - 0.7, Steel melting shop - 1.5||4930.00
|26.||Mahendra Sponge and Power Pvt. Ltd||Sponge iron - 0.27, Steel Billet - 0.15||485.00
|27.||Hind Energy and Coal Beneficiation (India) Pvt. Ltd.||Sponge iron - 0.405, Steel melting shop - 0.216||505|
(Investment in INR crore)
(Capacity in in million tones per annum)
Major Integrated Steel Projects likely to be commissioned by 2012-13
|SAIL||IISCO Burnpur||West Bengal||From 0.5 to 2.5
|SAIL||Bokaro||Jharkhand||From 4.36 to 4.61
|SAIL||Bhilai||Chhattisgarh||From 3.93 to 7.00
|SAIL||Rourkela||Orissa||From 1.90 to 4.20
|SAIL||Durgapur||West Bengal||From 1.80 to 2.20
|RINL||Visakhapatanam||Andhra Pradesh||From 2.9 to 6.3
|TATA Steel||Jamshedpur||Jharkhand||From 6.8 to 10
|Essar Steel||Hazira||Gujarat||From 4.6 to 8.5
|JSW Steel||Vijayanagar||Karnataka||From 6.6 to 10
|JSPL||Raigarh||Chhattisgarh||From 2.4 to 3.0
|Ispat Industries||Dolvi||Maharastra||From 3.0 to 4.2
|Bhushan Power & Steel Limited||Jharsugda||Orissa||2.8
|Bhushan Steel Limited||Angul-Dhenkanal||Orissa||3
(Crude steel capacity in million tones per annum)
BS reported that the closure of mines in Karnataka’s Bellary-Hospet region has started hitting the downstream sector. Around 5,000 foundry units and a similar number in the sponge and pig iron sector have been facing a big shortage of iron ore supply. The foundry sector makes key equipment for the auto and engineering industries.
Following a Supreme Court order about two months earlier, private mining of iron ore in Karnataka has been suspended. Downstream sectors such as foundries are, therefore, facing a big shortage of supply of quality pig iron, the key raw material for all major auto and engineering grade foundries. The frequent rise in interest rates by banks is another problem for the foundry sector.
Bellary-Hospet is known for high-grade iron ore, not available in abundance elsewhere in the country. Karnataka produces nearly 30% of India’s yearly output of 220 million tonnes of iron ore.
Mr AK Anand director of The Institute of Indian Foundrymen said that “Steel and other metallurgical industries are severely affected.”
Mr C Nagarajan a National Council member of IIF said that “Foundry units are facing problems from both sides lower realization and high cost of production due to a dramatic spurt in interest rates for their working capital.”
Interest rates have risen by 4% in the past six months and raw material prices by 15 to 20%.
According an estimate, about 500 small and independent sponge iron units, largely in Chhattisgarh, Gujarat, Tamil Nadu and West Bengal, are facing a closure threat due to non availability of ore.
The shortage of ore has already started begun impacting steel and other downstream producers. Sponge iron prices first shot up to INR 24 a kg when the mining ban in Bellary-Hospet was announced. It then cooled, to the current INR 22 a kg.
Mr Amitabh Mudgal vice president of Monnet Ispat said that “The sponge iron industry is currently breaking even. Any rise in raw material prices from here will turn the returns negative.”
Mr Anand further said that an estimated 32 million tonnes of good quality ore is annually required to meet the need of industry, of which 3.5 to 4 million tonne is for feeding the foundry industry for production of pig iron. Currently, iron ore mining in Bellary-Hospet is restricted to the public sector NMDC, whose capacity is inadequate to meet the foundry industry need.
(Sourced from BS)
* Macarthur shares trade below Peabody/ArcelorMittal offer price
* CITIC says has not set timetable for listing
By Donny Kwok
HONG KONG, Aug 19 (Reuters) - China's Citic Group has yet to decide whether to launch a counterbid for Australian coal miner Macarthur Coal Ltd , which is the subject of a $5 billion hostile takeover from ArcelorMittal SA and Peabody Energy Corp .
Citic Group, together with subsidiary Citic Resources Holdings Ltd , owns about 24 percent of Macarthur, making it the single largest shareholder of the world's biggest producer of pulverised and cleaner burning coal.
"It is not yet time to show our stance (on Peabody's offer)," Citic Group Chairman Chang Zhenming told reporters on Friday. He did not elaborate.
Macarthur shares fell 1.2 percent to A$15.32 on Friday, below the ArcelorMittal/Peabody offer price of A$15.66 per share, including a 16 cent dividend.
ArcelorMittal and Peabody opened their takeover for shareholder acceptance on Thursday, after Macarthur rejected the offer. Macarthur has told shareholders not to take any action on the offer until it sends out its formal response in the next two weeks.
Arcelor and Peabody own 16.1 percent of Macarthur and need another 34 percent of shareholders on board for the offer to be accepted.
Separately, Citic Group said it had not yet set a timetable for an initial public offering, Chang said.
Last year, media reports said CITIC Group was considering a $12 billion listing in Hong Kong in 2011, a move that could help the state-owned conglomerate raise its profile and cut debt.
"We are still working on an internal restructuring ... we don't have a timetable yet," he added.
Bloomberg reported that coal for delivery to Amsterdam, Rotterdam or Antwerp with settlement next year dropped 35 cents or 0.3% to USD 126.75 a metric tonne by 8:52 AM in London.
Mr Mark Pervan an analyst with Australia & New Zealand Banking Group Ltd said that prices showed a mixed performance. He added that “Activity in the European market increased significantly, despite the weak economic backdrop.”
The data are drawn from information supplied by ICAP Plc, GFI Group Inc, Spectron Group Ltd, Credit Suisse Group AG, IHS McCloskey, Bloomberg, Tradition Financial Services and Tullett Prebon Plc.
(sourced from Bloomberg)
Reuters reported that coal shipments from the Kuznetsk Basin were 4 million tonnes less than planned during May to July due to problems caused by a large number of freight firms.
Mr Aman Tuleyev governor of Kemerovo which includes the Kuzbass fields said that regional coal miners had built up stockpiles of 10.7 million tonnes of coal, double normal levels.
He said that the shortfall was caused by a lack of coordination among freight operators in Kemerovo, where more than 200 firms are active.
A statement on the Kemerovo region's website said that "The situation could worsen in winter, when shipments to thermal power stations begin.”
Shipping delays are frequent in the winter months, when difficulties such as those associated with unloading frozen coal delay unloading.
A large number of private freight operators have entered the market in recent years, and Tuleyev said the problem has been compounded by the ongoing privatisation of the RZhD Russian state rail company's freight operations.
The governor said that "In order to resolve the problem, it is necessary to improve the legal and regulatory framework.”
He asked Russian Prime Minister Mr Vladimir Putin to order the relevant ministries and government departments to take steps to ensure that coal can be shipped from the Kuzbass.
The statement further said that "A number of companies have cut coal output because it is not possible to ship production.”
(sourced from Thomson Reuters)
* Output falls 0.8 pct from June on daily basis
* Output drops 1.2 pct yr/yr for fifth-consecutive fall
* Higher auto output offers some hope, but yen clouds export outlook
TOKYO, Aug 19 (Reuters) - Japan's crude steel output was almost flat in July from the previous month, as the strong yen hurt steel exports while carmakers ramped up production following a post-quake slump.
Crude steel output totaled 9.11 million tonnes in July, down 0.8 percent on a daily production basis from June after adjustment for the number of days in the month, the Japan Iron and Steel Federation said on Friday.
From a year earlier, output fell 1.2 percent for a fifth consecutive year-on-year fall. That was an improvement, however, from a 5 percent drop in June, a 7 percent slide in May and a 6 percent drop in April, after the devastating earthquake on March 11.
"We expect steel demand to further increase in the coming months thanks to higher output at carmakers, but the strong yen is worrying," an industry official said.
Exports of Japanese steel products plunged 9.3 percent from a year earlier to 3.5 million tonnes in June as the yen hovered near a record high against the U.S. dollar. That was a fourth consecutive year-on-year decline.
Japan's five blast furnace steelmakers, including the world's No.4 steelmaker, Nippon Steel Corp , and fifth-ranked JFE Steel Corp , plan to produce 21.35 million tonnes in the July-September third quarter, 7 percent more than in the second quarter, as they target growing demand from carmakers.
Second-quarter output of 19.89 million tonnes was the lowest in two years due to the impact of the earthquake, which damaged Sumitomo Metal Industries Ltd's plant on the northeast coast.
Mr Beni Prasad Verma minister of steel has said that the government have no proposal so far, to reopen the iron ore mine in the area of Kudremukh National Park. However, a part of the loose secondary weathered ore lying in the already broken up area, is posing environmental and ecological threat to the surroundings, particularly to river Bhadra.
To protect from the possible ecological damage, the government has filed an IA No. 3087/2011 before the Hon’ble Supreme Court for allowing Kudremukh Iron Ore Cooperation Ltd for removing approximately 20 million tonnes of loose secondary weathered ore without any drill or blasting.
In a written reply in the Rajya Sabha he said that KIOCL Ltd. is not in the possession of any forest land falling in the Kudremukh National Park. Even the part of forest land which was under lease for mining to KIOCL Ltd has been handed over to Forest Department of government of Karnataka in compliance with the order of Hon’ble Supreme Court. Subsequently, government of Karnataka had included an area of 3703.55 ha of forest land into the Kudremukh National Park vide its Gazette Notification dated January 9th 2007
Iron ore focused explorer Nemex Resources Limited has announced the results of 17 ironstone samples from its Coastal Project in western Guinea.
These samples were collected as part of a staged program to target a regionally extensive ironstone unit across the Nemex licence portfolio. The sample locations were selected from Landsat imagery, which has been interpreted to show the ironstone unit to be a regionally extensive geological unit that outcrops over extensive open plains or bowals as they are locally known.
These samples are from one of the three Coastal Project Licences, the 244 square kilometers Telimele licence, with samples NGX033 and NGX036 collected up to 12 kilometers away in new licence areas to the southwest and south respectively.
The results show iron grades ranging between 53% and 64% (averaging 60.7% Fe) and are consistent with the five ironstone sample results (60% to 63% Fe) that were announced to the ASX on June 6th 2011. These new sample results are considered to be representative of the ironstone unit and confirm that it is regionally significant.
Dr Peter Turner MD of Nemex said that "We are delighted with these results and Nemex has now demonstrated that this ironstone unit is not only a consistently high grade direct shipping ore iron product, but that it appears to cover a very large area. Our strategy now is two fold to explore the other 2,000 square kilometers of our licenses whilst drilling at the Telimele licence."
Nemex initially plans to dig a series of pits to determine the thickness of the ironstone at various sites across the Telimele licence area. Nemex's Rotary Air Blast and Reverse Circulation drill rig is scheduled to depart Perth in August, arriving in Guinea later in the year. Metallurgical test work is planned once the drilling is underway.
Dr Turner said that "Although we are trying to determine what type of rock this represents and the effect weathering has had on iron enrichment, we are happy that it is consistently high grade in iron, occurs at surface and that it sits close to rail and ports."
SINGAPORE Aug 19 (Reuters) - Volumes traded on the Singapore Mercantile Exchange's iron ore futures remained thin a week after the bourse launched the contract with market participants opting for widely-traded swaps instead.
SMX, owned by India's Financial Technologies , introduced its cash-settled iron ore futures contract on Aug. 12, hoping to tap into a growing market to hedge prices of the steelmaking raw ingredient.
From two lots traded on the launch date, volume rose as high as 38 lots on Tuesday. Volumes reached 36 lots by 0909 GMT on Friday.
The most-traded August iron ore contract stood at $177.50 a tonne, after closing at $177.80 on Thursday. It began trading at $177 on Aug. 12.
Each lot is equivalent to 100 tonnes and is settled against the 62-percent iron ore index of Metal Bulletin .IO62-CNO=MB. Trading is from 10 a.m. to 8 p.m. (0200-1200 GMT).
Metal Bulletin's index, based on spot deals in China, stood at $177.29 on Thursday, its highest since Aug. 9.
"It will take some time before people start trading it. More people are into swaps and I don't think many people are even aware about SMX's iron ore futures," said a Singapore-based iron ore trader.
SMX's iron ore contract is the world's second futures contract after two exchanged in India launched the first in January.
"The SMX MBIO Index futures contract is only a week old, it will be prudent to comment on the trading volumes and traction seen only when we complete one month of trading," SMX said in a statement.
Unlike Indian contracts <0#ICIO:> <0#MRNE:>, which are denominated in rupees and are limited to domestic players, the SMX contracts will be priced in U.S. dollars and open to global investors.
But Indian futures are also suffering from low trading volumes being limited to domestic investors and as more market participants prefer the widely-traded forward swaps.
The volume of iron ore swaps cleared globally rose to an all-time high of more than 4 million tonnes in July, valued at more than $700 million. The bulk of that, or 3.92 million tonnes, was cleared by the Singapore Exchange.
Introduced in May 2008, iron ore swaps are cash-settled contracts that allow steelmakers and traders to hedge their cost after the industry abandoned a system of pricing contracts once a year in favour of a more flexible quarterly scheme.
According to the website of China Ministry of Commerce, the average mine-mouth coal price in Inner Mongolia has soared by 14% to CNY 296.72 per tonne in the first half of this year compared with a year earlier.
In the beginning two months, Inner Mongolian coal prices were slightly pushed up by winter heating demand. The average mine-mouth steam coal settlement price in its main producing areas rose 0.82% over early January to CNY 297.07 per tonne.
Since March, coal demand started to shrink and prices stepped down. The lowest point in H1 appeared in April at CNY 291.87 per tonne.
May mark the commencement of a vigorous upswing. By June, the average mine-mouth steam coal settlement price registered CNY 304.93 per tonne.
(sourced from MySteel.net)
Cline Mining Corporation has announced that its first commercial sale of metallurgical grade coking coal was shipped on August 9th 2011 by Cline's wholly owned subsidiary New Elk Coal Company LLC from its coal mine located near the town of Trinidad in southern Colorado, USA.
The first coal shipment was made into rail cars from the company's newly constructed bulk rail load out facility at Jansen Yard near Trinidad. The coal was from first mine production and meets the full specification grade of New Elk's high quality metallurgical grade coal for steelmaking purposes. The New Elk metallurgical coal is a high volatile, high fluidity, high FSI and low sulphur product.
Ongoing continuing coal deliveries and shipments are scheduled according to the company's production schedule going forward. Cline is continuing to mine metallurgical coal from its New Elk Coal Mine, which is being placed in stockpiles on the mine surface. The coal preparation plant is treating the raw coal produced from the mine and achieving the high specification standards for New Elk met coal. An active coal marketing program is in full effect to establish and settle long term customer relationships. Bulk samples of the product coal are being produced and distributed to the major national and international steel industry participants.
New Elk production of metallurgical steel making coal slated for world markets is anticipated to ramp up to a production rate of 3.0 million tons annually by the first quarter of 2012, as described and detailed in the National Instrument 43-101 Technical Report titled "NI 43-101 Technical Report New Elk Mine Project. Las Animas County, Colorado USA prepared for New Elk Coal Company LLC, subsidiary of Cline Mining Corporation" dated May 27th 2011 prepared by Mr Leo Gilbride and Mr Timothy A Ross of Agapito Associates Inc.
* Says buys two prospecting rights for 235 mln rand
* Says assets suitable for coal exports, Eskom supplies
JOHANNESBURG Aug 19 (Reuters) - South Africa's sixth-largest coal producer Optimum Coal said on Friday it had bought two prospecting rights from BHP Billiton Energy Coal South Africa (BECSA) in a move to boost its porfolio.
Optimum said it would buy from BECSA the Remhoogte prospecting rights, which have an inferred resource of around 306.5 million tonnes.
The 235 million rand ($32.6 million) acquisition will be funded through the company's own cash resources and re-financed group debt facilities, it said.
Chief Executive Mike Teke said the acquisition gives Optimum an attractive growth opportunity.
"At this stage it is envisaged that Remhoogte will principally be a replacement for Optimum Colliery's export saleable production in the medium to long term, although market conditions and an improvement in export logistics could result in the development of the project being expedited," Teke said in a statement.
The company said a planned Remhoogte mine is expected to produce 2.5 million tonnes of export coal per year and an estimated 400,000 tonnes of middlings product well suitable to supply power utility Eskom's nearby Camden and Majuba power stations.
The site is located near the coal rail line leading to the Richards Bay Coal Terminal, it added. ($1 = 7.207 South African Rand) (sourced Reuters)
Reuters reported that global miner BHP Billiton is looking to build a new rail line between some of its inland Australian coal mines and the coast in a move that could threaten dominant coal haulage firm QR National.
QR National relies on the miner for about 40% of its business in the coal mining state of Queensland.
The plan was to build a rail line from Queensland's Bowen Basin, source for most of Australia's exports of steel making coal, to a port at Abbot Point where BHP Billiton was preferred developer for a new coal export terminal.
The West Australian reported that Atlas Iron has increased its iron ore reserves in the North Pilbara by 50%.
Atlas said its reserves in the region were estimated now at 79.3 million tonnes.
Atlas North Pilbara projects include the Pardoo and Wodgina mining operations as well as the Mt Dove, Abydos, Mt Webber and McPhee Creek development projects.
Atlas holds 70% of the Mt Webber project a joint venture with Altura Mining and 75% of the Daltons project in joint venture with Haoma Mining.
The company in a statement said that "Atlas is now an established iron ore producer and exporter with strong customer relationships. The company has achieved significant growth in resources and reserves in the same period where we expanded production by 600%."
Atlas said it was continuing to focus on reserve conversion in the North Pilbara with up to five drill rigs in the field. It said further infill drilling designed to extend and upgrade resources is underway or proposed at Wodgina, Abydos and Mt Webber.
The upgrade was not enough to lift Atlas shares from the wave of negativity on world markets with the miner falling eight cents or 2.13% to USD 3.67 by 8.25 AM.
(sourced The West Australian)
Aquila Resources Limited refers to the announcement by Red Hill Iron Limited that it has instituted legal proceedings against API Management Pty Ltd a company jointly owned by AMCI (IO) Pty Ltd and Aquila Steel Pty Ltd a wholly owned subsidiary of Aquila.
Aquila believes the substantive claims of Red Hill Iron Limited are without foundation and, having discussed the matter with its co-joint venturer AMCI, advises that API will vigorously contest the proceedings.
Australian miner BHP Billiton has announced that it has received approval for a US$437 million (BHP Billiton share) investment to expand the Cerrejon Coal mine located in La Guajira, Colombia.
BHP Billiton's investment represents one third of the US$1.311 billion expansion to be undertaken by Cerrejon Coal, with joint venture partners British mining company Anglo American and Switzerland-based miner Xstrata contributing equal investment in the project.
The expansion will enable Cerrejon Coal's saleable thermal coal production to increase by 8 million mt per year to approximately 40 million mt per year.
Construction will start in 2011 with completion expected in 2013. The capacity increase to 40 million mt per year is expected to take place by the end of 2015.
BHP Billiton owns 33.3 percent of Cerrejon Coal in equal portion with joint venture partners Anglo American and Xstrata.
Coal inventory has indicated a rapid decline at six major power supply companies in China, namely, Zhejiang Provincial Energy Group, Shanghai Electric Power Generation Group, Guangdong Yudean Jinghai Power Generation, China Guodian Group, China Huaneng Group, and China Datang Group. As of August 11, aggregate coal inventory at the companies in question showed a month-on-month decline of 1.31 million mt, falling to 11.23 million mt.
Meanwhile, the price of coal at the eastern Chinese port of Qinghuangdao has declined for six weeks in succession. As of August 12, at Qinghuangdao port the prices of Datong gifted mixed coal (6,000 kcal), Shanxi excellent mixed coal (5,500 kcal) and Shanxi common mixed coal (5,000 kcal) stood at RMB 875/mt ($137.15/mt), RMB 825/mt ($129.31/mt) and RMB 725/mt ($113.64/mt) respectively, down by RMB 5/mt ($0.78/mt), RMB 10/mt ($ 1.57/mt) and RMB 5/mt ($0.78/mt) as compared to last week's prices.
By Agnieszka Flak, Reuters
JOHANNESBURG (Reuters) - South Africa's National Union of Mineworkers members at Impala Platinum on Friday rejected a revised pay rise offer from the world's second largest producer of the precious metal and will refer the dispute to arbitration.
The platinum sector is the latest to be affected by a wave of disputes in the country's mid-year "strike season" after stoppages in the steel, fuel and mining sectors threaten to dent growth in Africa's biggest economy.
"The members unanimously rejected the revised offer. We insist on a double-digit increase across the board," said Eddie Majadibodu, the NUM's chief negotiator at Implats.
Implats had raised its offer to between 8 and 10 percent, while the union has been asking for 14 percent, nearly triple the inflation rate. NUM workers in the gold and coal sectors have already reached deals for 7 to 10 percent increases, which could serve as benchmarks in the platinum talks.
The labour disputes are likely to unnerve investors already wary about putting money into the country due to steep power tariff hikes and a debate around nationalisation of the country's mines.
Talks at Amplats are set to continue on Friday. The two sides moved closer as the company raised its offer on Thursday to 7.5-8 percent, while the union lowered its demands to between 11 and 12.5 percent.
Implats and bigger rival Anglo American Platinum (Amplats) account for two-thirds of global platinum supply and any strike could push prices higher.
In a separate dispute, more than 200,000 water, sanitation and refuse workers seeking 18 percent wage increases are expected to march in Johannesburg on Friday after setting fires and looting vendors at rallies in Cape Town this week.
The NUM, with more than a quarter million members in various sectors, has also threatened a strike at state utility Eskom, which supplies almost all of the country's power, after rejecting a 7 percent pay rise offer.
Any significant pay rises would affect the utility's strained balance sheet and could lead to further steep rises in electricity tariffs.
Further wage hikes will make it more costly to hire the workers needed to bring power by 2014 to the 25 percent of the country's households that still have no access to electricity.
Wage deals over the past years of double to triple the inflation rate have made the country less competitive by driving up the cost of a workforce which is already more expensive and less efficient that those in emerging market peers.
But the ruling African National Congress, which is in an alliance with organised labour, does not want to antagonise a group that has supplied it with millions of votes, by pushing workers to accept more modest pay increases.
According to a report issued by the United Nations Conference on Trade and Development, in 2010, global iron ore pellet output totaled 388.1 million tonne up by 32% YoY hitting an all-time peak level.
In 2010, China was the world's largest iron ore pellet producing country with an output of 110.3 million tonne. The UNCTAD report points to strong demand in the global iron ore pellet market. More than 5 million tonne of new iron ore pellet production capacities are under construction in China.
In terms of exports, in 2010 Brazil was the world's largest exporter of pellets with an export volume of 53.6 million tonne while Canada ranked second with 21.2 million tonne.
Dearborn, Michigan-based steelmaker Severstal North America announced Thursday that it has successfully launched its new five-stand, six-high 72'' wide coupled pickle line tandem cold mill (PLTCM) at its steel mill in Dearborn, Michigan. The $450 facility is expected to ramp up to full capacity of 2.1 million net tons within six months.
The launch of the PLTCM is complemented by the construction and impending start-up of a $285-million hot-dipped galvanizing line in the same production complex in Dearborn. The new coating line will be targeting critically exposed applications for automotive customers and other critical cold roll consuming manufacturers. It is currently nearing completion with a scheduled launch in December of 2011.
Sergei Kuznetsov, Chief Executive Officer, Severstal North America, said, "The launch of our new cold rolling complex is a key component in our goal of becoming one of the world's most efficient and advanced steel producers. The new equipment will enable us to offer products of superior quality and provide exceptional service to our customers, as well as produce the next generation of advanced high strength steels (AHSS) for automotive applications."
By Nelson Banya, Reuters
HARARE (Reuters) - Zimbabwe's government has given foreign firms, including mines and banks, a 14-day ultimatum to submit "acceptable" plans on how they propose to transfer majority stakes to local owners or risk losing permits, state media reported on Friday.
The firms include platinum miners Zimplats, which is majority owned by Impala Platinum (Implats), and Mimosa, Implats's 50-50 joint venture with Aquarius Platinum. Others include Rio Tinto's Murowa diamond mine, British American Tobacco and local units of British banks, Standard Chartered and Barclays.
The companies risk losing their operating licences if they do not submit the ownership plans, the state-controlled Herald newspaper reported.
Indigenisation and Empowerment Minister Saviour Kasukuwere wrote to the firms on July 28, informing them they had failed to provide acceptable details of how they proposed to transfer 51 percent shareholdings to local people within the five years stipulated by the law, the newspaper said.
In March, Kasukuwere gave mining firms 45 days to file empowerment plans and imposed a September 30 deadline for the transfer of ownership.
The deadline to submit empowerment plans has since passed.
Last month, Kasukuwere told a conference the government had rejected 175 empowerment plans from mines which mostly proposed selling 25 percent shareholdings, with 26 percent being made up of credits awarded for social investments made in infrastructure, health and education facilities.
Zimbabwe's coalition government set up by President Robert Mugabe and his rival Prime Minister Morgan Tsvangirai two years ago following disputed elections is divided over the implementation of the empowerment law, enacted in 2008 and championed by the president's ZANU-PF party.
Tsvangirai has warned that the law threatens Zimbabwe's economic recovery, which started after the formation of the power-sharing government in 2009, following a decade in which GDP shrank by as much as 50 percent, according to official figures.
Peabody Energy and ArcelorMittal have announced that the offer for Macarthur Coal Limited is now open for acceptance.
Peabody and ArcelorMittal urge all Macarthur shareholders to accept the compelling offer to receive a substantial premium for their investment. The bidder's statement of PEAMCoal Pty Limited, a company owned by Peabody and ArcelorMittal, is being sent to Macarthur shareholders.
Under the offer, Macarthur shareholders will be offered AUD 15.50 cash per share, valuing the equity in Macarthur at approximately AUD 4.7 billion. Macarthur shareholders will also be entitled to retain any final dividend declared by Macarthur in respect of the financial year ended June 30th 2011, up to an amount of 16 cents per share, without reducing the offer price. This represents a total value of AUD 15.66 cash per share.
Mr Gregory H Boyce chairman & CEO of Peabody Energy said that "Macarthur shareholders now have a clear opportunity to accept the PEAMCoal offer at a price that gives full credit to the state of Macarthur's current operations and development projects."
Mr Aditya Mittal CFO & member of the Group Management Board at ArcelorMittal said that "We feel this is a compelling offer which embodies value and certainty for Macarthur shareholders."
The total value to be received by Macarthur shareholders of up to AUD 15.66 per share represents a substantial premium of:
41% to AUD 11.08 per share, the closing price on July 11
45% to AUD 10.82 per share, the one month VWAP to July 11
38% to AUD 11.32 per share, the three month VWAP to July 11
30% to AUD 12.02 per share, the twelve month VWAP to July 11
The offer is scheduled to close on September 20th 2011 unless extended.
Thursday, August 18, 2011
The News reported that 100%productions has been made possible after the repair of blast furnace of Pakistan Steel Mill.
According to the Iron Mechanic Department, the most important department of Pakistan Steel, 63 casters worked day and night to fix the problem.
A ceremony was organised in this regard, in which the Acting CEO Pakistan Steel Mr Wasif Mehmood was the chief guest.
In appreciation of hard work and intense labour, cash prizes of more than 200,000 rupees were distributed among the casters.
While lauding the efforts of the employees, the chief guest said casters have proved that with hard work and sheer determination, even the toughest of jobs can be done. He said by repairing the blast furnace, 100% production has been made possible.
(sourced The News)
According to the State Statistics Committee of Kazakhstan, in January to July of the current year Kazakhstan produced 2.926 million tonnes of crude steel up by 21.4%YoY.
Production of flat steel in Kazakhstan in the first seven months increased by 17.4%YoY rising to 1.893 million tonnes while output of galvanized rolled steel went up by 9.7%YoY to 363,941 tonnes.
In the first seven months of 2011, Kazakhstan saw its ferroalloy production fall by 0.2%YoY to 983,333 tonnes.
(sourced from SteelOrbis)
Thursday, 18 Aug 2011
Interfax, citing court documents, reported that OAO Magnitogorsk Iron & Steel was sued by its partner in an iron ore venture after assuming ownership of a license to the venture’s largest ore deposit.
Atop International Group, which holds 49% of the OAO Bakalskoye Rudoupravleniye venture, filed a suit at Chelyabinsk in Russia, after the license to the Techenskoye ore field was transferred to Magnitogorsk.
Magnitogorsk got the license in May following regulatory approval.
Mr Kirill Golubkov, a spokesman for Magnitogorsk, said today by phone when Bloomberg News called, without elaborating that “We see no legitimate grounds for this suit.”
216 coal blocks with geological reserves of about 50 billion tonnes have been allocated to eligible public and private companies under the Coal Mines (Nationalization) Act, 1973. Of these, 24 coal blocks have been de allocated. Of the de allocated coal blocks, two coal blocks were re-allocated to eligible companies under the said Act.
Mr Pratik Prakashbapu Patil minister of state for coal informed the Lok Sabha in view of above, the net allocated blocks are 194 with geological reserves of about 44.44 billion tonnes.
The minister said that the responsibility of developing the coal block as per the prescribed guidelines and milestones rests entirely with the allocattee companies who are required to obtain the statutory clearances including forestery and environmental clearance for both mining as well as end use project.
It is informed that at the time of advertising the coal blocks for inviting applications from eligible companies, the Ministry of Coal places in its official Website all the relevant details of each coal block considered for allocation including the location of the coal block (longitudes and latitudes), estimated coal reserves, estimated coal grade etc well in advance.
Further the guidelines for allocation of coal blocks are also placed in the Website of Ministry of Coal. It is for the companies to exercise due diligence before making application for allocation of a particular coal block.
The Polish government has confirmed that it will introduce an excise duty on thermal and coking coal next year.
Finance ministry said that coal producers will pay a duty of about PLZ 1.3 /1GJ from January 1, although the calorific value will determine the amount of tax to be paid.
Poland was previously exempt from the excise duty when it joined the EU in 2004. But the European Commission now wants to introduce new rules for taxing energy products. Coal used for energy production may be excluded from the excise duty, but the details have not been confirmed, according to proposed EU legislation.
It is still unclear whether the excise duty will affect export prices.
A broker said that “As far as we know, Polish coal prices will definitely increase as of January 2012. But it is difficult to speculate whether that will affect export prices.”
The Queensland government announced it has banned all mining exploration on urban land or within a 2 kilometer buffer of urban land, effective from August 16th 2011.
NSW Greens MP Jeremy Buckingham said that "In NSW right now there are major mining projects occurring perilously close to major centres.”
But a NSW Resources spokesperson said the state government had no current plans to impose a 2 kilometer buffer between mining and residential areas.
Victorian Premier Ted Baillieu added: "We have prospecting mining rights laws here and we don't have any proposal to change them here. Farmers do have rights under Victorian law and everybody has a right to have their say but there are also mining and prospecting rights." The current ban in Queensland includes regional centres such as Ipswich, Toowoomba, Beaudesert, Rockhampton, Mackay and St George, but the state government said the current legislation may be revised to include smaller mining communities.”
A German utility source told Montel that German river levels are still at significantly low levels although, with utility demand muted in the summer period, there is currently no marked impact on coal supply to plants.
German weather service said that river levels across Germany are generally between 5 to 50% below average, although levels on the river Elbe at Torgau are more than 50% below average, with a depth on Tuesday of around 150cm.
The utility coal and freight analyst said that “At the moment, it seems that everything is okay, as utilities are carrying out maintenance at this time of year, so demand is not so strong.”
According to official government forecasts, water levels at Kaub, on the river Rhine below Koblenz, may drop to below 190cm in the week to August 20, after initially rising to more than 200cm in the coming week.
Kaub levels which were last seen at 194cm are an important indicator, as it is one of the widest and shallowest sections of the Rhine. When water levels fall below 200cm, utilities or coal suppliers are liable to pay barge operators a low water premium and levels on some river sections are currently at around 180cm.
CCCMC released on August 16 2011 the average reference prices for coke export transactions concluded in the previous week USD 495 PER tonne to USD 500 per tonne FOB.
|Issuance Date||High Price||Low Price
In USD per tonne
The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters is the largest trading association in China. The CCCMC reference prices are average prices for coke export transactions concluded the week prior to issuance date of such reference prices.
It is reported that Kumba Iron Ore gave some reasons as to why it shouldn't be compelled to supply iron ore to ArcelorMittal SA at a discount, arguing its obligation to the steelmaker had lapsed at the destruction of ArcelorMittal SA's 21.4% mineral right over Sishen mine.
The arguments was delivered during the North Gauteng High Court case over the present status of the 21.4% old order mineral right which ArcelorMittal SA held prior to April 30th 2009. By virtue of the right, ArcelorMittal SA was entitled to the delivery of 6.25 million tonnes per year of iron ore mined from Sishen at a price of cost plus 3%.
Delivering arguments on the legal effect of Kumba subsidiary Sishen Iron Ore Company's successful conversion of its 78.6% older order right and ArcelorMittal SA's failure to do so, Kumba's Senior Counsel Mr Chris Loxton said the old order rights had in effect placed a limitation upon each holder’s right to dispose, at a profit, of what was mined.
Mr Loxton said that "For so long as ArcelorMittal SA continued to own a 21.4% undivided share of the right to iron ore, SIOC would have been obliged to account to ArcelorMittal SA for its share of what it mined. That obligation arose from ArcelorMittal SA' right of ownership in the severed ore. The question which arises is what the consequences are of the destruction of ArcelorMittal SA's undivided 21.4% share in the right to iron ore by virtue of the provisions of the MPRDA."
He added that "The effect of that destruction is that since the right to a share of the iron ore mined was from May 1st 2009 no longer held by anyone, neither did SIOC's obligation to account to some person for 21.4% of such iron ore survive."
Mr Loxton said that it was important to note that this consequence didn’t results because SIOC had by some process acquired ArcelorMittal SA' share of the right to iron ore. The same result would have followed had ArcelorMittal SA waived its right to a share of the ore mined by SIOC.
He added that "Since the right to a share of the iron ore mined was no longer held by anyone, neither did SIOC's obligation to account to some person for 21.4% of such iron ore survive."
State run Coal India, which toppled Reliance Industries as the country's most valued firm, said it is aiming to become number one company of the country in the near future in terms of revenue as well.
At August 17th 2011, the Maharatna firm had a market capitalisation of INR 251,296 crore on the Bombay Stock Exchange and ahead of erstwhile leader RIL marginally by INR 4,167 crore.
Mr NC Jha chairman of CIL said that "We have already become number one public sector company and now we are working on becoming number one firm in the country, profit and turnover wise as well. It is just a matter of some years.”
Attributing the recognition of the Maharatna firm as the number one company on the bourses to its 0.382 million employees, Mr Jha said that "It has happened due to extensive efforts of all Coal Indians, who have been engaged in coal mining day and night."
The Maharatna company, incorporated in 1973 in Kolkata, had reported a 64% growth in its consolidated net profit at INR 4,143 crore during the first quarter of this fiscal vis a vis INR 2,525 crore reported in the April to June of FY'11.
FRANKFURT Aug 18 (Reuters) - Germany's biggest steelmaker ThyssenKrupp held off bidding for a German railway contract after it was subject to a price-fixing probe, a German newspaper reported, citing industry sources.
German authorities said in late June they were investigating 10 steel and rail companies, including ThyssenKrupp subsidiary GfT Gleistechnik GmBH, for operating a cartel between 2001 and 2008.
Thyssen normally buys rails for Deutsche Bahn tenders from competitors such as Voestalpine and ArcelorMittal , but supplies from these companies were "no longer available", forcing Thyssen to stay out of the bidding, the sources told financial daily Handelsblatt.
Handelsblatt calculated from cartel documents in its possession that damage claims linked to the case could total up to 1 billion euros ($1.4 billion), on top of any fines imposed by regulators.
Austrian metals group Voestalpine said in July it had blown the whistle on the scheme and said it expected to escape fines in the investigation. ($1=.7099 Euro)
BS reported that India, a major supplier of steel making raw material iron ore to China, will have a major bearing on the Beijing strategy to loosen what is perceived to be the monopolistic pricing power of the Brazilian Vale and Anglo Australian BHP Billiton and Rio Tinto.
But, last budget raising the export duty on iron ore fines to 20% and bringing it on par with lumps and intermittent shipment dislocations from Karnataka could not be to Chinese liking. This is because China is trying to frame a 5 to 10 year strategy of reducing its uncomfortably large ore dependence on the big three mining groups.
In fact, their tight grip over the Chinese market has allowed them to usurp price setting power. Recent Indian moves discouraging exports, suspected at the prompting of local steel mills runs counter to the now evolving Chinese strategy of having a more diversified supply source than now.
As revealed so far, the strategy will be resting on two strands. First, attempts will be made to rapidly step up imports from Chinese owned offshore mines, particularly in Africa. Second, China will develop and strengthen imports sources beyond Australia and Brazil. That Vale, BHP and Rio have over 60% share of Chinese ore imports is in itself a measure of Beijing's uneasiness with the current state of affairs.
China will be counting less and less on Indian supplies of ore fines, which at one point were around 100 million tonnes a year, in its moves to break the grip of the world’s three major miners.
China should also be taking into account the ambition of iron ore, endowed Indonesia and Vietnam to emerge as steel producers of some size.
As all such things happen, China’s search for supply alternatives to Vale, BHP and Rio will automatically shrink.
Even then, China will bring into play economic diplomacy to seek full or part ownership of mines or equity investment linked to assured off take of mine production in south east Asian countries. While the country will ever remain on the lookout for iron ore resource acquisition opportunities across geographies, the focus will remain on West Africa.
MEPS consultancy has forecast an 8.5% rise in Chinese ore demand to 1.07 billion tonnes in 2011, when crude steel production will climb to 728 million tonnes. In the first half of 2011, the country’s ore imports rose 8% to 334 million tonnes, with buying cost rising a hefty 54% to USD 53.78 billion. China’s ore self reliance pursuit has not, however, dissuaded mineral majors from opening new mines. New investments find justification in forecasts that prices of ore with iron content of 62% will stay above USD 150 a tonne till at least 2015. Such prices are obviously assumed on the basis that Chinese import demand is not to be dimmed too soon.
Global Earth Energy and its joint venture partner Modern Coal said they will complete the acquisition of Samuel Coal by September 6th 2011 or sooner.
According to the companies, details for full production of site production are being coordinated with local resources under the supervision of the JV and Samuel Coal.
The JV is now ramping up to move forward with multiple letters of intent already in place, due to the abundance of resources on the Samuel Coal properties.
The coal mines are located on about 5,000 acres near Hindman in the eastern part of the US state of Kentucky.
(sourced from Coal Energy)